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New Bedford SSA Suit Goes to Trial

A federal judge ruled last week that a lawsuit between the city of
New Bedford and the Steamship Authority can go to trial, although the
judge imposed a set of strict limits that will block any plan by the
Whaling City to turn the case into a giant legal fishing expedition.

U.S. District Court Judge Douglas P. Woodlock said he will allow six
months for discovery in the case, plus he will allow the city to look at
the last six years of records at the public boat line. Each side in the
case will be allowed 12 depositions.

The city had wanted a much broader scope for discovery, including
access to some 50 years' worth of records at the SSA.

Judge Woodlock made the ruling from the bench at a hearing in U.S.
District Court in Boston last Wednesday.

The complaint against the SSA was filed last year in federal court
by New Bedford city officials amid their aggressive campaign to open up
ferry service between the city and the two Islands.

The complaint charges that the SSA violates interstate commerce laws
by restricting ferry service between the mainland and the two Islands.
Under the state statute that created the SSA in 1960, the boat line has
the power to license its competitors. The core mission of the boat line
is to provide dependable year-round ferry service to the residents of
the two Islands.

Attorneys for the SSA had filed a motion to dismiss the complaint,
among other things questioning whether the city has standing to bring
the claim against the state-chartered boat line in federal court.
Attorneys also questioned whether the lawsuit violates state sovereignty
because both the SSA and the city are considered subdivisions of the
commonwealth.

Federal courts are expected to respect state sovereignty and the
decisions of the state legislature. There is little case law in this
area. Both in an earlier hearing and again last week, Judge Woodlock
appeared to show an interest in this legal issue.

The purpose of the hearing last week was to address the pending
jurisdictional motion and also scheduling issues.

Judge Woodlock decided that a complete record in the case should be
developed first.

The legal discovery portion of the case will now begin and will run
through the winter months. It is expected that both sides in the case
will file motions for summary judgment in April.

If summary judgment is not allowed on either side, the case will
then go to trial.

John Montgomery, a partner at Ropes & Gray in Boston who
represents the SSA in the case, said the ruling by Judge Woodlock is not
a setback.

"We had an obligation at the beginning of the case to raise
the jurisdictional issue, and it's going to remain a live issue in
the case as it proceeds," he said.

New Bedford city solicitor George Leontire could not be reached for
comment.

Mr. Leontire has repeatedly said in public statements that the city
will drop the lawsuit if it is allowed to have a full seat on the SSA
board of governors. He repeated this assertion in a story in The New
Bedford Standard Times last week about Judge Woodlock's ruling.

Mr. Montgomery called the city's position incongruous -
he said on the one hand the city is claiming that the boat line runs a
system that is unconstitutional, while on the other hand the city is
offering to withdraw its lawsuit if it is allowed a seat on the board
for the very same boat line.

"It's unseemly," Mr. Montgomery said.

The case has seen some unusual turns. In a ruling late this winter,
Judge Woodlock ordered the city to find a private carrier to submit a
license application to the boat line. The order was intended to force a
real-life test of the city's claim that there were numerous
private carriers who wanted to run freight service to the Islands
- but had been somehow restrained by the boat line.

"Put it to the test," the judge said at the time.

In the end, only one carrier submitted a license application -
Seabulk International Inc., the same carrier that the SSA is now paying
to operate a pilot freight program between New Bedford and the Vineyard.
The Seabulk application was later rejected by the SSA, in part because
the application included a long list of conditional demands, including
the demand that the boat line force some 8,000 trucks to use the private
service.

The application was framed in language that read like a legal
challenge to the boat line licensing authority.

The unanimous decision to reject the application was accompanied by
a detailed, 50-page staff report from SSA general counsel Steven Sayers.

Mr. Montgomery said yesterday that the burden of proof now lies with
the city to prove its allegations against the boat line.

Among other things, the city claims that the freight reservation
system is flawed and discriminating.

"If they think there is discrimination in the reservation
system they're going to have to prove it - and as to the
licensing policy, I don't know what more can possibly be said
about that," Mr. Montgomery said.

He also said: "The judge has decided that he wants a more
complete factual record - and now it will become plain to the
court that the city's goal here is to obtain open, unfettered
access to the authority's terminal facilities for all comers, and
that is not an option that is dictated by the constitution of the United
States."

He continued:

"The city has already told the court that there are numerous
carriers who wish to operate freight and passenger service, and it turns
out that is not true. Similarly, they have told the court just last week
that the reservation system is rife with discrimination and they will
now be put to the burden of proving that - and they will
fail."

Mr. Montgomery concluded: "Once the record is fully developed,
we expect the case will be resolved in favor of the authority -
either because the court lacks jurisdiction or on the merits.

"It will be resolved on the merits if that is necessary;
however the authority intends to demonstrate to the court that this case
is a substantial interference in the sovereign interests of the
commonwealth. It violates the fundamental principles of our federal
system for the city of New Bedford to be threatening the legislature and
the Steamship Authority with this litigation."